The exploitative Crop-Lien system permitted the affluent planter class to imprison formerly enslaved people and low-income white people in figurative debt chains. African Americans who had just gained freedom lacked the resources and the land necessary to start a farm. Through the crop-lien system, they were compelled to rent land from landowners and buy commodities from nearby rural merchants on credit (Otken, 1984). Punitive interest rates associated with this credit rendered it hard to repay the obligation. Sharecroppers and farmers became trapped in an endless loop of hardly earning ends meet and hardly ever generating enough to repay that year’s loan due to the weight of this debt. Numerous formerly enslaved people eventually worked in the same area.
The crop lien system had many characteristics in common with earlier forms of slavery. Hence it may be considered another sort of slavery. African Americans were classified as free, yet they frequently had contracts with their former masters, received pitiful salaries, and could not work for any other employer. The black population at the time could not support a family, much less themselves, in these circumstances. They were beaten, jailed, and punished if these agreements were frequently broken. They did not even have the freedom to possess their land or the ability to vote.
Farmers could obtain fertilizer, supplies, groceries, and other items underneath the crop lien system by granting traders a lien on their crops, the most sought-after cotton, and tobacco. Merchants could charge greater costs for such transactions by lending money until crops were harvested; typically, they added a charge of 20% to 50%, although in some cases much higher (Otken, 1984). The result was a quick spread of country stores throughout South and North Carolina. Many tenant farmers were forced into economic slavery due to violations inside the crop lien system, which allowed obligations to landlords and retailers to carry over from one year to another. When excessive debt caused foreclosure, many landlords became part of farm tenants.
Reference
Otken, C., H. (1984). The Ills of the South or Related Causes Hostile to the General Prosperity of the Southern People. Putnam.